yuman

Asset Class Correlations

DrBagel,
I think 10-Yr treasuries in the tables are measured in price, not yield. The dollar drops with short terms rates, while gold rises (-0.64), so do bond prices.

Dollar Hurt by Geopolitical Concerns and High Oil

How can Oil prices are drive the currency market? For example, oil pushes up AUD? Suppose OPEC cuts supply to bump up prices, how would that drive up AUD/USD?

Let's consider OIL/USD, OIL/AUD and AUD/USD. SImple math gives
(OIL/USD)/(AUD/USD) = OIL/AUD
This relationship ensures that (OIL/USD) and (AUD/USD) moves in the same direction to maintain reasonable OIL/AUD. If we have to find a driver, I'd say that the larger drives the smaller, in terms of trading volume or.

Upside to Oil Stocks?

Historically, did oil stocks trail oil prices? Did they oscillate, 1997-1999, in comparable magnitudes?
The chart seems to show that XLE participated in the rises and falls of USO in lock step. Besides the fundamentals, are there other evidence that XLE trails oil prices?

Is Oil a Bubble? Part Two

Would someone deconfuse me on the effect of speculators?
Since they buy/sell contracts and most of those have a life of a month, the effect of speculators must be limited to this lifespan. At the end of the contract's life, the buyer must sell and the seller buy, canceling out their effect. Therefore, the speculators only serve to facilitate the market during that lifespan.
The continued rise in oil price beyond a month due to speculation can only be explained with continued inflow of speculative funds that support the uptrend.
Then, the question is why is there so much net inflow that bet on the rising oil? Why don't the speculators bet on dropping oil?
At $130, there are still plenty of buyers of oil, who obviously accept the price as reasonable. If price does not destroy demand, why is this a bubble? Or, is this a demand bubble, rather than a price one?